Cisco Systems (Nasdaq: CSCO) has been promising a dividend for some time, and recent financing moves pointed to an imminent announcement. Well, it's here: Cisco's first-ever cash dividend will be born as a $0.06 payout, and it's tagged as a quarterly dividend. Cigars for everyone!

Assuming that the $0.06 payout per share stays stable over the first year, we're looking at a dividend yield of about 1.4% at today's share price. With about 5.5 billion shares outstanding, this amounts to an annual cost of about $1.3 billion or just under 15% of Cisco's free cash flow in 2010.

Considering that the company already spent some $9 billion over the last 12 months to buy back its own shares, Cisco seems quite committed to returning value to shareholders. And before you start complaining about the company's stock-based compensation programs eviscerating the value of those buybacks, you should also know that Cisco issued $3 billion in new shares over the same period. Most of the buybacks really do achieve something more than just staying afloat.

Translate that $6 billion net buyback activity into straight dividends and you'd get something like a $1.09 annual payout per share or a 6% yield. That's quite comparable to established dividend kings such as AT&T (NYSE: T) and Verizon (NYSE: VZ), both of whom hover around the 6% yield mark without any buybacks to speak of.

Don't expect Cisco to do that reshuffling anytime soon, though -- and maybe never. Fellow techies Intel (Nasdaq: INTC) and Microsoft (Nasdaq: MSFT) are both following a very similar model to what Cisco has in place now, especially Microsoft, which over the past 12 months spent $13 billion on annual net buybacks but only $4.8 billion on dividends.

So Cisco joins the ranks of grown-up tech titans and starts out with an already-popular financial model. The yield isn't big enough to make Cisco an income-generating powerhouse today, though that might change with steady raises over the years, or a few more sharp blows to the underlying stock price.

Cisco would have by far the thinnest payout on our Income Investor scorecard, but the path to a thousand payouts begins with a single penny, and Cisco has started its journey.

Interested in more information about Cisco? Add the stock to your watchlist.

Fool contributor Anders Bylund holds no position in any of the companies discussed here. Intel and Microsoft are Motley Fool Inside Value selections. The Fool has created a bull call spread position on Cisco Systems. The Fool owns shares of and has bought calls on Intel. Motley Fool Options has recommended a diagonal call position on Intel. Motley Fool Options has recommended a diagonal call position on Microsoft. The Fool owns shares of Microsoft. Motley Fool Alpha owns shares of Cisco Systems. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.